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Steve Harmon - Disrupting? Actually, Superseders


Steve Harmon

March 19 · Issue #23 · View online

Beyond the hype, inside the world of venture capital, tech, stocks and trends, from Silicon Valley to Shanghai, from veteran investor and entrepreneur Steve Harmon - followed by many leaders in finance and tech, see more:

Several examples of industry shifts to entirely new models

Paradigm shift.
Game changer.
All have been used to describe the phenomenon of a new company entering into an industry and impacting the incumbents.
The incumbents have a vested interest in the status quo. That’s why an Amazon could take on Walmart in plain view of Sam Walton and kids. Because Sammie and the kids were doing ok with the big box stores.
After all, their collection of fine art didn’t miss a beat when Jeff Bezos appeared.
Same goes for Novell, Sun, Netscape, AOL, Yahoo, and even the entire taxi industry. Each felt secure in its bubble, insulated from competition. In particular the taxi industry with its city licensing requirements and global “yellow car” branding look and feel, seemed unstoppable. Most people never would have said: “you know, we can do that better.”
Uber and Lyft and Didi (in China) all do it better. And their market value is in the many billions. Turns out, getting a person from one spot on the planet to another was WIDE OPEN.
Wide open to who? to those that looked.
The problem was, nobody was looking. Everyday billions of people wake up and participate in yesterday’s business. Along for the ride. Get on the bus.
Get Off The Bus
The old expression is “stop and smell the roses.” In a world of screens few people even bother to look up from their mobile phone. But to understand the Ubers and Googles is to divorce yourself from the status quo and dare to ask: “what if?”
As an investor and entrepreneur for decades I have always asked that. It’s what led me to eBay, Amazon, Baidu, Tencent, and many more way before their “grown up” potential could be seen by most. Look at the toddler and see the Michael Jordan (yes, the basketball player).
Getting off the bus means thinking independently of the mainstream. Believe it or not, in 1995 I had to convince tens of thousands of people that the Web would be bigger than any other medium.
Ripe Fruit
In 2001 I keynoted a conference in Hong Kong that said data was the new oil (an idea that The Economist picked up on only in 2018). The notion of data being the most valuable aspect of the Web led to Facebook becoming extremely valuable as a company. Intentions, actions, profiles, mapped out like never before.
Now, however, my new thesis is tech to fight tech. Data becoming a private stored value versus exploitable by Facebook and Google, among others. It’s not about just privacy, it’s about the value of your data for you.
Authors of books own their words.
Painters own paintings.
But you don’t own your data, your digital life.
Not yet.
Plant new trees
While everyone is now beginning to see the issue of privacy, it isn’t the issue. The issue is value of data.
You cannot “fix” companies using the old model of data exploitation. They cannot add a layer called “privacy” and think that’s it.
It’s bigger than a company. The solution is usually not tearing up the old orchards in a slash and burn approach (although this may happen in some degree).
The solution in industry is planting new trees free of the bad fruit of the existing model.
Real estate replacement
I’d like to give you a personal example. With my new company Ditto we have looked at the real estate industry and asked many “what ifs”. Our goal is not to simply disrupt, it is to replace the outdated real estate model all around.
I’m not going to go into detail how we are doing this. But patents have been filed around an entirely new platform for real estate. A platform that asked “what if?” and answered with “here’s how.”
Yes, we have work to do. But so did Uber and Lyft. Along that line, if you are interested in hearing more (and qualified) let us know. We will be announcing more. Real estate, re-invented.
Replacements, Superseders
The point is that in the digital environ there are levels of change. Uber was a superseder. It upended the taxi industry. iPhone was a paradigm shift, an improvement to the mobile phone experience.
Revolution versus evolution.
What I am focused on are two aspects:
1) a better tech platform that does things more efficiently
2) a better business model that cuts the old-fashioned excess
For example, the real estate market in America is several trillion dollars annually. It dwarfs ecommerce by miles, kilometers (pick your metric).
While not easy to change it is overdue to replacement. Change assumes consent of the incumbent. Replacement requires none of that.
Uber didn’t go to the taxi authority in each city and recommend they add Uber as an option.
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